A bipartisan group of lawmakers on Thursday unveiled federal legislation that would create a 20%-30% U.S. film incentive in order to secure U.S. dominance over the entertainment industry. The incentive would stack on top of tax credits, combining to create one of the most generous subsidies for entertainment.
“If it passes and it stacks clean, shooting in Georgia or California or New York is the best deal on the planet,” said Joe Chianese, senior vice president for incentives at Entertainment Partners. “Nothing overseas comes close.”
The legislation comes following two years of effort from Hollywood unions and the Motion Picture Association, which lobbies on behalf of the major studios.
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The 20% base credit would apply to all labor costs, both below-the-line and above-the-line. A series of “uplifts” would grant 5% bonuses for filming in rural areas or for independent productions, bringing the potential maximum to 30% of labor costs. Los Angeles County would also qualify for a 5% bonus for the next five years as a federal disaster area.
“If we want to keep American storytelling in America, we have to level the playing field, and that’s exactly what this bill does,” said Rep. Nathaniel Moran, R-Texas, one of the bill’s sponsors. “This isn’t about subsidizing Hollywood — it’s about supporting the American worker, one story and one production at a time.”
Over the last four years, there was a major slump in production, which led to over 50,000 job losses in Los Angeles alone. This prompted calls for action to be taken to counter the generous subsidies offered in Canada, U.K, and 63 other countries.
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Sen. Adam Schiff, D-Calif., said he has been pushing for years for a federal incentive to stop the exodus of jobs overseas. “Now, we have the best opportunity in decades to get it done,” he said.
Some states already offer tax incentives of 30% or more. California is currently dealing with a debate over whether to increase its state incentive, which is already set at 35%-45%, but is capped at $750 million per year.
Chianese, of Entertainment Partners, noted that it’s also unclear how other countries might respond to a U.S. film incentive. He affirmed that there is going to be “some response.” “You have to imagine that the UK and Canada are going to do what they can to protect the industry they have.”